Anyone wondering why the outbreak of fear and loathing in financial markets about Europe won’t go away, the latest quarterly report from the Bank of International Settlements has the explanation.

Judging by the strength of the labour market, the Australian economy is not as sluggish as other figures would have us believe.

At last a small hint that the moves by the Chinese government to control property prices are having an impact, with the news that prices rose 12.4% in the year to May in the country’s 70 largest cities.

New Zealand exporters and business now face the prospect of a high currency holding back the tentative recovery for them.

The combination of high private and public sector debt levels in developed countries, extreme swings in monetary policy and greater government involvement in the economy likely mean we have entered a more volatile macro economic environment.

Earnings updates, many on the downside, continue to appear as listed companies condition investors on what to expect for the June 30 year or half year financial reporting period.

Reserve Bank Governor, Glenn Stevens, thinks it’s a good time for Australian households to be saving more and borrowing less.

China’s exports in May grew about 50%, according to leaks in Beijing, news that sparked a surge on the local stockmarket.

The release of housing finance and consumer confidence figures yesterday warmed us up nicely for yesterday’s speech from Reserve Bank Governor, Glenn Stevens.

While Japanese annual first quarter economic growth is expected to be cut to around 4%-4.2% (around 0.9%-1% quarter on quarter) when the government releases its latest estimate later today, early figures for April suggest the economy remains basically on course.

The iron ore and coal price boom continues with strong demand from Asian mills driving quarterly prices higher.

Business confidence fell sharply in May, as expected, thanks to the mixed flow of news and events in the past month.

Although the local sharemarket and dollar fell sharply yesterday, the economy is still in good shape.

Oil, wheat, corn and metals took a hammering Friday night in Europe and the US after the weak American jobs figures for May and the outbreak of more concerns about the financial health of Europe.

A very weak start for markets in Asia today after Wall Street and European shares fell heavily Friday night following the release of very poor jobs numbers for May for America.

The fall out from the US May jobs report, Australian jobs, US retail sales and Chinese economic data for May will be the focus in markets this week.

Banks in Australia and other countries will not have to worry about the push from the US and Europe for a global levy or tax, but they will have to hold more capital and liquidity to withstand a future credit crunch.

Last month the spin from some economists to explain the continuing strength of car sales was that April’s sales figures had been boosted by vehicles still being delivered to business buyers from the sales boom late in 2009 which was driven by the now ended tax breaks.

Now we know what all this talk about our improving terms of trade means.

The perceived importance of asset allocation in driving investor returns faded from the 1990s as a result of high overall returns from most asset classes and relatively high correlations between bonds and shares.

The Japanese economy won’t be hurt or hindered by the decision of Prime Minister Yukio Hatoyama to step down.

The stockmarket cost to BP’s Gulf of Mexico oil leak has topped the $US100 billion mark for the companies directly involved, and other companies in the sector seeing tens of billions of dollars in market losses as well.

As an historical record and explanation, the March quarter national accounts help us understand what the Australian economy was doing in the first three months of the year.

Don’t look for the Reserve Bank to lift interests rates any time soon; Europe’s problems are dominating its thinking now, perhaps as much as the health of the Australian economy.

Perhaps some further stimulus might be needed for the home building sector later in the year.